Assessments of Financing Climate Change Mitigation and Financing Strategy for Manufacturing Industries

“Accelerating Industry’s Climate Response in Sri Lanka” is a five-year project funded by the European Union under the GCCA+ initiative. Its objective is to contribute to climate change mitigation by supporting the implementation of Sri Lanka’s Nationally Determined Contribution (NDC) for the industrial sector. More specifically, the project objective is to scale up the climate change response of Sri Lanka’s industrial sector through the design and implementation of technical, policy, regulatory, and financial tools and mechanisms to accelerate the deployment of renewable energy, energy and resource efficiency technologies, and best practices. The project comprises five expected outputs; the services required under this project relate to the delivery of services under the Expected Output 5: Pilot technologies and methodologies leading to improved energy efficiency and reduction in GHG emissions are tested to be then replicated. The scope of work for which Econoler has been contracted falls under four main components: 1) An assessment of the landscape of financing climate change mitigation actions in Sri Lankan manufacturing industries; 2) the development of a financing strategy and risk mitigation programme, including an achievable roadmap; 3) delivery of a capacity building programme to the banks and financing institutions; and 4) delivery of tools and guidelines for local banks and financing institutions.

Econoler has been hired to undertake an assessment of the landscape of financing climate mitigation actions in Sri Lankan manufacturing industries and to develop a financing strategy and risk mitigation programme, including an achievable roadmap. To fulfil the requirements of this assignment, Econoler will: 

• Undertake extensive stakeholder consultations and desk reviews to:
  • Identify financing requirements and interest among the priority industries for investments in low-carbon technologies;
  • Identify risks, success factors, challenges, and barriers for financing low-carbon technologies;
  • Develop a mapping of the current and potential stakeholders that are relevant to finance NDC targets in the industrial sector;
  • Identify and review the existing and potential financing schemes available for low-carbon technologies.
• Undertake an analysis to develop a financing strategy that will identify the broad areas of interventions to mobilize and unlock financing for mitigation actions, including an achievable roadmap as well as a risk mitigation and action plan;
• Build on the results of a thorough assessment of the risks associated with financing low-carbon technology projects in Sri Lanka through desktop research and interviews with banks, ESCOs, and other relevant stakeholders and propose measures to address identified risks;
• Define the current knowledge and capacity of local financial institutions in assessing low-carbon technology projects; a capacity needs assessment will be completed through structured and semi-structured interviews with individual banks as well as other financial institutions and relevant stakeholders;
• Based on the results of the capacity needs assessment, Econoler will develop a training programme, manuals, and materials for bank technical staff and deliver the training courses to senior managers, groups of specialists including relationship and risk managers, as well as the credit department and division heads.

The services of Econoler will provide UNIDO and project beneficiaries with a detailed financing strategy that will enable Sri Lanka to unlock and mobilize funding for GHG mitigation actions in its industrial sector.